GRAHAM HISCOTT A mortgage till you’re 99 New ‘later life’ home loans on the way

A BANK has launched mortgages that borrowers could still be paying off when they’re 99 years of age. Aldermore, one of a new breed of challenger banks, has entered the “later life” lending market for older home owners.

The deals could prove a lifeline for those trapped on interest-only loans and an alternative to equity-release plans.

The range offers interest-only and repayment mortgages for those aged 55 to 85. The interest-only deals can be extended but must be repaid by the time someone reaches 99.

They include two, three, five and 10-year fixed-rate deals from 3.38%, and a variable rate from 4.18%.

Those either remortgaging or taking out new loans can borrow up to £400,000. They need at least 25% equity for repayment loans and 40% for interest-only products.

Later-life mortgages could be a solution for the hundreds of thousands of over-65s trapped on interest-only home loans who have no option other than to sell their homes. It could also be an alternative to equity release for those wanting to leave an inheritance.

With equity release, interest rolls up and swallows a chunk of the property’s value, affecting any inheritance. But with these loans, borrowers will have to have enough money to meet the monthly mortgage payments.

Aldermore’s move follows changes by the Financial Conduct Authority to lending rules for older borrowers in March. Charles Mcdowell, Aldermore’s commercial director, said: “We believe a change is needed in the way we consider later-life lending.”

David Hollingworth, of

London & Country

Mortgages, said: “We have to tread the line appropriately when lending to older and potentially more vulnerable borrowers. Affordability checks will be crucial.” Oil = $78.21

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